AUS: ASIC applies for order closing unregistered land-banking scheme

ASIC has commenced proceedings in the Federal Court of Australia to wind up a land banking scheme known as the VKK Investments Unit Trust (VKK scheme), as well as the trustee and operator of the scheme, Gem Management Group Pty Ltd (Gem).

The VKK scheme owns land located at 64 Hutton Road, Keysborough in Victoria.

ASIC understands that around 125 investors have invested a total of approximately $22 million into the VKK scheme. Gem has operated the VKK scheme since May 2010.

ASIC alleges that the VKK scheme constitutes a managed investment scheme which has not been registered, in contravention of the Corporations Act 2001(Act). ASIC also alleges that Gem, which does not hold an Australian Financial Services licence, has also breached the Act by operating an unregistered managed investment scheme.

ASIC is seeking to appoint liquidators to both the VKK scheme and Gem.

Gem and the VKK investors will have the opportunity to make submissions to the Court in relation to ASIC's application.

These proceedings are part of ASIC's wider and ongoing investigation into land banking schemes.